Chrysler goes on an EV roll

“U.S. Department of Energy support for domestic advanced technology is an important enabler for Chrysler Group and its key suppliers in order to understand and test customer acceptance and the capability of PHEV systems in a variety of real-world conditions.” –Paolo Ferrero, senior vice president-powertrain for Chrysler Group LLC

So Chrysler Group LLC is making another leap within the electric vehicle market with both feet in a big way – rolling out a plug-in hybrid electric vehicle (PHEV) version of its popular Dodge Ram pickup truck sometime in 2011, as well as bringing the all-electric version of the Fiat 500 here to the U.S. in 2012.

This is also yet another sign of how Chrysler’s parent company – Italy’s Fiat SpA – is trying to ramp up its presence in the U.S. market, notably on the commercial vehicle side of the light-duty ledger.

Last year, Chrysler unveiled a sweeping five-year plan formulated Fiat (which saved the struggling automaker from oblivion in 2009 after acquiring it with $12 billion U.S. government loan) that included slicing its truck products off from the rest of its Dodge group into a separate division called Ram Trucks, while planning to boost annual sales of commercial trucks some 50% by 2014.

And now it seems PHEV trucks are going to play a role in that plan, as Chrysler is getting a Department of Energy (DOE) grant of up to $48 million as part of the agency’s Vehicle Electrification program (itself funded by $2.4 billion in funds from the American Recovery and Reinvestment Act or “stimulus bill” passed in early 2009).

Paolo Ferrero, Chrysler’s senior vice president-powertrain, said his company is planning to build a total of 140 Ram PHEVs for a three-year demonstration project that includes various geographic and climatic locations across the U.S. “This initiative represents how government, automotive industry, suppliers and key partners are reaching common goals and demonstrates how rapidly this type of advanced technology can be brought to market,” he added.

He said the Ram PHEV features Chrysler’s 5.7-liter HEMI V-8 with a two mode hybrid transmission and a 12 kilowatt-hour (KwHr) lithium ion battery from Electrovaya Inc. that offers up to 20 miles of pure-electric range without the need for gasoline and an overall fuel economy improvement more than 65% for average drive cycles, Ferrero noted.

[Here’s a review of the key features of the 2010 Dodge Ram pickup, which won’t be changed much for the 2011 model year.]

It should also be noted that in 2008, Chrysler Group tried to bring a Ram Hybrid Electric Vehicle (HEV) to market but could not, in the OEM’s words, “formulate an appropriate business case” and thus ditched development work on the 2011 Ram HEV altogether. Now, though, backed by Fiat and U.S. government cash, Chrysler is back at the truck hybrid tables again.

This is a big deal because, like I said above, it’s another sign of the company’s make-or-break push back into the U.S. commercial vehicle market – one crowded with some seriously good players.

First, there’s Ram’s large commercial van project – a product most likely going to be based on a platform developed via a joint venture between PSA Peugeot Citroen and Fiat. The Fiat version is called the “Ducato” while the Peugeot version is known as the “Boxer” in Europe, with the Ducato roughly similar to the now-discontinued Dodge Sprinter van.

Remember, Mercedes-Benz USA re-assumed responsibility for the sales, marketing, distribution and service of the Sprinter van back in September 2009, creating a new subsidiary to handle it – Daimler Vans USA, LLC, based in Montvale, NJ – as Mercedes’ owner, Daimler AG, believed some big opportunities awaited by going solo in the U.S. commercial van segment.

To compete against the likes of Ford Motor Co.'s Transit Connect light-duty commercial van, Ram also plans to add Fiat’s Doblo to its product offerings in 2012.

To improve the fuel-efficiency of its truck lineup -- making it competitive with the Transit Connect and other such models -- Chrysler said it would roll out a Fiat engine and fuel-saving engine technology as soon as 2010. By 2014, three-quarters of the company's current engine lineup for this segment is expected to be replaced.

[Back in January, Nick Cappa, engineering P.R. manager, talked about some of the new engine technology coming to Chrysler’s vehicle lineup from its parent company, Italy’s Fiat. Though only the V-6 Pentastar in this video relates to Chrysler’s light-duty trucks, it illustrates how the company’s are sharing resources.]

The adoption of Fiat models wholesale, with re-tooling for the U.S. market, is part of a massive realignment of resources within Chrysler as part of its new five‐year business plan, noted Scott Kunselman, Chrysler’s chief engineer, at a big press event last year.

“We’re going to maximize use of common platforms, systems, and components through sharing with Fiat Group and expansion of Chrysler usage,” he explained. “We’ll be focused on maximizing fuel economy by reducing vehicle weight and optimizing aerodynamics; enhancing speed to market using Fiat's timing benchmarks, virtual tools, and component communization; and implement advanced powertrain systems across vehicle platforms.”

The company said it believes that shared purchasing between Chrysler and Fiat will save it some $2.9 billion from 2010 through 2014, while it plans to invest more than $120 million in its retail network of dealerships in 2010 as it works to make dealerships more inviting to consumers.

In order to better accommodate commercial truck users, “dealers will have extended service hours and additional equipment to service this segment of the market,” stressed Peter Grady, vp-network development & fleet for Chrysler.

Richard Palmer, Chrysler’s chief finance officer, added that automaker expects all these efforts to help it break even on an operating profit basis by 2010 and break even on a net profit basis by 2011. Palmer said the carmaker projects revenue would grow about 20% per year over the next five years and reach $67.5 billion by 2014, when Chrysler expects to report an operating profit in the range of $4.7 billion to $5.2 billion.

To round things out on the EV side of the market, Chrysler is also planning to engineer and produce a pure electric vehicle using the Fiat 500 platform. Shown earlier this year at the North American International Auto Show, Chrysler plans to begin manufacturing the Fiat 500EV for the U.S. market in 2012, with all powertrain engineering and vehicle development taking place at Chrysler’s headquarters in Auburn Hills, MI.

Pricing will be announced closer to launch, but will be competitive with similar electric vehicles in the market, the company added.

"The alliance with Fiat presented new opportunities to merge Chrysler engineering knowledge with new platforms and the Fiat 500EV is an outstanding example of our efforts," noted Kunselman, noting that the company also intends to build a Fiat 500 with a combustion engine for North America, due for rollout in late 2010.

It’s a big roll of the dice for a company once on the ropes and headed for extinction. We’ll see in the coming years how this bet pays off for Chrysler.